- Joined
- Aug 30, 2007
- Messages
- 133
I`ve come up with some numbers for a Rent To Own on a property that I`ve owned for 3 years, and which will be vacant in Feb 2010.
I want to get this going early enough to get a good tenant-buyer.
I`m assuming the current value is 360K based on a comp report (thanks Jared Chamberlain). With 5% app per year, I would ask min $375K or appraised value after one year, whichever is greater. Then $393K after the second year, or appraised value, whichever is greater.
Current payment: $1240/mo, PIT
Base market rent: $1500/mo
Using Ron Legrand`s down payment assistance program:
First option: $1700/mo, $200 goes towards down payment, I take $100 off purchase price
Second option: $2000/mo, $500 goes towards down payment, I take $500 off purchase price, can skip 2 months for the $500.
For a $375K house, total household income (3.5 multiplier, as recommended by Mark Loeffler) should be $107K/year for a qualified tenant buyer.
After one year (purchase price $369K under 2nd option):
Initial down payment: $7,000
Accumulated: $6,000
Total: $13,000
They are short $23K to purchase with 10% down.
After two years, (purchase price $387K under 2nd option):
Initial down payment: $7,000
Accumulated: $12,000
They are short $26K to buy with 10% down.
Is this the way this is supposed to work?
This is the first time I would be doing a Rent To Own. Is there a better way to do this?
Cheers,
I want to get this going early enough to get a good tenant-buyer.
I`m assuming the current value is 360K based on a comp report (thanks Jared Chamberlain). With 5% app per year, I would ask min $375K or appraised value after one year, whichever is greater. Then $393K after the second year, or appraised value, whichever is greater.
Current payment: $1240/mo, PIT
Base market rent: $1500/mo
Using Ron Legrand`s down payment assistance program:
First option: $1700/mo, $200 goes towards down payment, I take $100 off purchase price
Second option: $2000/mo, $500 goes towards down payment, I take $500 off purchase price, can skip 2 months for the $500.
For a $375K house, total household income (3.5 multiplier, as recommended by Mark Loeffler) should be $107K/year for a qualified tenant buyer.
After one year (purchase price $369K under 2nd option):
Initial down payment: $7,000
Accumulated: $6,000
Total: $13,000
They are short $23K to purchase with 10% down.
After two years, (purchase price $387K under 2nd option):
Initial down payment: $7,000
Accumulated: $12,000
They are short $26K to buy with 10% down.
Is this the way this is supposed to work?
This is the first time I would be doing a Rent To Own. Is there a better way to do this?
Cheers,